What is Crisis Management: A Complete Guide

In 1982, seven Chicago area residents died from ingesting cyanide maliciously placed in their Tylenol. The manufacturer, Johnson & Johnson, responded by immediately recalling 31 million bottles and setting the gold standard of crisis management – one that many brands today fall short of. Let’s change that.

“By withdrawing all Tylenol, even though there was little chance of discovering more cyanide laced tablets; Johnson & Johnson showed that they were not willing to take a risk with the public’s safety, even if it cost the company millions of dollars. The end result was the public viewing Tylenol as the unfortunate victim of a malicious crime.” The company’s response was a success because they put people first. As a result, the loss to shareholders was considerably minimal and the brand quickly healed from the damage and flourished. And your brand could too!

The Importance of Continuous Consumer & Market Intelligence

In This Crisis Management Guide

We regularly explore crisis management from a variety of different angles. Recently, we shared the step-by-step process of building a crisis management plan. In this guide, we will expand on that to reveal:

  • The stages of crisis management, from planning through to activation and then evaluating your efforts
  • Crisis management mistakes to avoid

Before we start with the three stages of crisis management, here are some notable statistics:

  • According to PwC, 69% of business leaders experienced at least one corporate crisis in the five years between 2014 and 2019.
  • More than 70% of companies that faced a major crisis during those five years now have a team dedicated to crisis management.
  • Headlines linking Forbes Top 100 companies to the word “crisis” appeared 80% more often[PDF] between 2010 and 2017 than in the previous decade.

What is Crisis Management?

So, what is crisis management? It is the application of strategies designed to minimize the loss to stakeholders during a disturbance in business operations. Crisis management is an important part of all types of organizations’ operations spanning every sector – public, private, and non-profit too.

An analysis of potential crises is enough to make most organizations put a plan in place, as they know it would be foolish not to. The plan outlines what to do to protect the business from foreseeable crises, how to handle unpredictable ones, and how to get back on the road after surviving these collisions.

Depending on your business model, industry, or age, the specifics of the plan will vary. We aim to give you the general guidelines on how to think about the process and the technical aspects of it. Let’s start!

The Three Stages of Crisis Management

Crisis management is bigger than crisis response, as it involves all activities dedicated to disarming a crisis. This includes recognizing the possibility of a crisis, fixing the situation, as well as learning from the experience, as we’ll detail below:

  • Pre-Crisis: Creating a Crisis Management Plan
  • Crisis Response: Actions to Take During a Crisis
  • Crisis Management Plan Evaluation: Key Learnings to Inform Future Efforts

1. Pre-Crisis: Creating a Crisis Management Plan

Traditionally, preparing for a crisis consisted in developing tools and methods based on the experiences of past events which were likely to occur again. Today, crisis preparedness involves both past experience and flexibility to adapt to the unknown.

These are challenging times for business leaders and crisis managers worldwide. The difficulty of dealing with unexpected or unpredictable circumstances is undeniable, but the challenge has also been due to other factors such as weak communication links, poor observation and interpretation of the landscape, and increasing vulnerability of the modern business environment.

Recent examples include unwise political stances, disease outbreaks at restaurants, and data breaches, among others.

Risk assessment is the analysis of threats, hazards, and vulnerabilities. Conducting such analyses requires combining information from different sources depending on the type of threat. Most recorded events are primarily analyzed through historical data – think natural hazards, terrorist attacks, pandemics, and industrial accidents. On the other hand, preparing for emerging and novel risks may require more flexible and adaptable plans. Understanding your category landscape and typical minefields is a good first step.

netflix-conversations

The use of monitoring systems, modeling and mapping tools, as well as information repositories has been growing. Additionally, better frameworks have improved information sharing within the organization creating a standard for continuous intelligence with dashboards that capture it all in real-time. This has improved the organization’s ability to analyze risks and prepare, as they can see conversations shifting amongst not only consumers, but in the market, as it happens.

Your dashboard should detail the following:

  • How big is the overall conversation related to the issue?
  • How big is it compared to previous issues?
  • How big as a % of the overall brand?
  • Who is talking and how broadly? Is it mostly insiders or consumer conversation?
  • What content is being shared?
  • How are people talking about the issue? Could we improve our messaging?

crisis-summary-metrics

The crisis management plan helps develop a broader and shared view on risks across the organization and enhances cooperation between different individuals and departments.

Once the risks are known, the next step in preparing for crises is proper allocation of resources. The aim of resource planning is to ensure that the various teams or individuals have the capacity and very clear understanding of their role when responding to a crisis. The crisis management plan addresses concerns such as the ranking of risks and how to prioritize if any trade-offs have to be made, as well as the mobilization of resources in-crisis. Who formulates the response? Who is the Plan B person if s/he is not available? And then periodic reviews of this crisis response is important.

And finally, as part of pre-planning, identifying early warning systems (EWSs) into a plan offers a way to detect potential risks and disseminate information to relevant personnel. Setting alerts around sentiment drops; brand mentions and other keyword triggers is helpful.

event-summary

2. Crisis Response: Actions to Take During a Crisis

The second stage of crisis management may begin when a threat is imminent or when an unforeseen event (or series of events) provokes a crisis. Response to a crisis is heavily dependent on having accurate and real-time information about the development of the event. How did this crisis start? Who are the main voices in the conversation – and where is this conversation happening?

source breakdown

Both operational and strategic units then work in tandem to determine likely impacts, what assets and interests are at stake, the trajectory of the crisis, and the capabilities of the organization.

A crisis may erupt suddenly or build up gradually over time. When it occurs, the crisis may be detected by EWSs, monitoring tools, internet users, media, competitors, etc. Ideally, it is detected by the victim organization placing it in a position to respond first – not your competitors. This is where your consumer and market intelligence capabilities’ rubber meets the road.

After the crisis is known, the crisis management plan should be deployed immediately, according to the guidelines. No matter the stage of the crisis, a well-developed plan should inform the appropriate messaging. Businesses only get one chance to do this right, as we’ll address in ‘mistakes to avoid’ below. It’s important to know who is leading the conversation and what they’re saying specifically:

who-is-driving-the-most-conversation

And once the ‘who’ and ‘where’ questions are answered, and a response is formulated – but don’t hit send yet! A response sent now would lack context. Businesses must quickly dig deeper than the surface insight by adding a ‘personal narrative’ layer to the analysis. This is the ‘what’ element and it reveals how your audience feels personally affected by the crisis. And this helps you craft messaging that will resonate and truly get to the heart of the issue:

personal-narratives

Beyond that – an exploration of the keywords mentioned in the conversation is also a must, as you’ll want to be very precise with the language you use. You want them to feel heard, by demonstrating that they are:

keywords-in-quid

Continuous monitoring comes next. And having all analytics aggregate in on place via an Intelligence Connector is essential here, as the proper flow of information makes it easier to monitor, analyze, and respond to the situation as it develops.

As the response and monitoring components unfold, pay close attention to consumer sentiment. Crises take an emotional toll on everyone involved, even those who aren’t impacted but are just reading about it – and it all relates to their decision to do business with you in the future or not. There could be loss of trust and anxiety, with consumers moving through emotional stages as they process the event – and these could be underlying emotions that are not immediately known.

It will be important to alleviate any lingering anxiety and rebuild trust with the stakeholders. And that can only happen when you know what they’re saying.

The Importance of Continuous Consumer & Market Intelligence

3. Crisis Management Plan Evaluation: Key Learnings to Inform Future Efforts

At the end of a crisis is a deep analysis of the event – what some organizations refer to as a “lookback.” The origin of the crisis is scoped as the question of what happened morphs into why it happened. The level of damage to stakeholders is determined and restoration efforts commence. Additionally, response activities are reviewed.

Analysis reveals the strengths and inadequacies of the crisis management plan, and of the organization as a whole. In cases where several teams were involved, the process is conducted meticulously at each level. If applicable, the services of external organizations enlisted for the crisis are assessed. No stone is left unturned, as this phase contributes significantly to how future crises are handled in the organization. And it is important to have meaningful metrics available that gauge shifting conversation volume as part of this effort.

Beyond conversation volume dying down – or remaining the same and trending positively, which is always nice – businesses should watch for specific keywords and hashtags identified during the crisis to see how those conversations are evolving.

top-terms-and-top-hashtags

A crisis may have many physical effects, but the more important factors that determine the future of the organization after successfully stopping it are often intangible. The aftermath often reveals changes in attitude that will change the way you do business.

Appointing a crisis evaluation team to assess the process isn’t a bad idea, but one with a focus on learning not placing blame. And the crisis management plan should be updated with the lessons learned from the event.

If it all sounds like a lot – it is! Imagine having to sort this all out last minute. Which leads us to another important consideration – crisis management mistakes.

Crisis Management Mistakes to Avoid

A crisis can happen to anyone at any time, and if your business hasn’t faced one yet, feel lucky. And if you don’t have a crisis management plan in place, add anxiety to help balance out that unrealistic emotion! And here are a couple of mistakes to worry over ahead of scrambling to piece together a last-minute plan when a crisis does hit, as one inevitably will:

Assumptions will sink your ship. You think you know your customers, and you probably do – but you’re not them and feelings change quickly for a wide variety of reasons. There is no way to know when a shift if taking place if you aren’t continuously monitoring online consumer and market intelligence.

Consumers and media outlets are posting about your brand online and they’re often not tagging you, so you don’t see it with traditional monitoring. And they’re also posting pictures of your brand and products without your knowledge – and they have lots to say about each.

popular-image-media

Message out in a way that makes sense. Just because you have a robust and engaged following on Facebook and you’re comfortable there, this does not mean Facebook is the place to focus your crisis response efforts.

Your Facebook community may love you no matter what you do, or maybe they’re just unaware of the crisis brewing on Reddit – but if Reddit is where your crisis is happening, to Reddit you go! Have an agile team that’s familiar with and ready to engage audiences on every social site, as needed. And know where that conversation is happening so you can address it head-on. Otherwise, what are you doing?

All of that can be avoided with solid planning.

Crisis Management Best Practices to Keep in Mind

Remember, as you think about crisis management:

  • Communication is key in crisis management. Build sturdy communication structures within the organization to ensure information flows smoothly in the event of a crisis.
  • Your crisis management plan should always be up to date. Update your crisis management plan with new information from recent crises within your own or similar organizations.
  • Record your activities. From creating a formal crisis management plan to making note of interesting goings-on during the crisis, documenting your activities provides you with a framework for dealing with other crises.

There is a belief that since you can’t see a crisis coming until it’s well on its way – and often, until it has arrived – you can’t plan for it. But you can plan for crises, and you must. Our current, increasingly online landscape requires it. And businesses can spot a looming crisis before it explodes with consistent AI-powered monitoring of consumer and market intelligence. We know a place that can help you do just that and more. Reach out for a demo today to see how it can help your business weather the next storm!

The Importance of Continuous Consumer & Market Intelligence

Premier social media analytics platform

Expand your social platform with LexisNexis news media

Power of social analytics for your entire team

Media analytics and market intelligence platform

Enrich your media analytics with social data

Media coverage for historical & real-time monitoring

Actionable data to drive your business decisions

AI, Image Analytics, Reporting Tools & more

Out-of-the-box integration with other data sources